*major business opportunity.
Great read Leigh – thanks for sharing. As you highlighted in your piece, there is not only a social responsibility dimension to this issue but also a major business responsability. To build up on your point regarding more frequent natural catastrophies, I could see Tenet leveraging their first mover advantage and operational expertise to propose their services to communities/organizations less well-equipped to deal with such emergencies. I find that their is a deal pool of companies operating in hostile/remote locations who may be interested in these services going forward. I see both a software (medical expertise) and hardware (modular emergency hospitals developed specifically for natural disasters) opportunity for them and needless to say that they could offer potential clients one of the two or both services. One issue that may arise from this shift in their business model is the strain that it could put on human resources currently focused on providing more conventional services.
Daniela, thank you for sharing this article that presents a model more and more relevant in markets in which congestion/transit times are making delivery services more relevant to consumers. As previous comments mentionned, not running out of money and keeping a close pulse on the competitive landscape will be key as the company finds its path to profitability. I am especially worried about their ability to keep a harmonious working relationship with the partners making the deliveries – that is key as you add on products to your service that may already offered by other players. I would add to that point, the importance of customer segmentation to understand people’s incentives and expectations – there are probably additional revenue/savings to be realized by offering a differentiated level of service.
Thanks for sharing JK. Digitization has truly taken the banking sector by storm. My personal wake up call to this trend came when a mobile payment provider founded less than ten years ago in Senegal put in a very serious bid to acquire the country’s second largest mobile network operator (https://www.developingtelecoms.com/business/operator-news/7222-millicom-backs-out-of-tigo-senegal-sale-to-wari-after-finding-new-buyer.html). That said, when it comes to the specific case of mortgages, I agree with the importance of the human interaction piece of the process that previous comments pointed out. In my opinion, taking out a mortgage is still a high-involvement purchase so I would expect people to want to ask a few questions to an expert (at the bank) before they take out the loan. To test the waters, I would start by offering the service to home buyers who already own a home/some equity as they are more likely to be well-informed on the process and product they are subscribing to. As those buyers will tend to be older, I feel better making mistakes will serving them than when catering to the millenial crowd who I rely on more for long term growth.
Thank you for sharing this Nidhi. The sole fact that Hatsun Agro has built a milk supply chain that works in rural India should be considered a huge success. It also speaks to their ability to execute the complex strategies that challenging environments demand. To try and answer your question on the merits of government involvement in rolling-out the IoT sensors, my answer is a big YES! I believe that this is a good case of alignment of interest/goals between the public and private sectors that it would be a pity not to leverage. All things equal, healthier and higher yielding cows will translate into higher incomes and improved living standards for farmers while also improving the quantity and the quality of the milk supply to Hatsun Agro. Early engagement with public authorities will also spare you any miscommunication or misunderstandings that may arise further down the line. Finally, I see a tremendous benefit of having local government partners on the ground to facilitate and share the costs of program monitoring and evaluation.
In my opinion, it will be hard to engage with hundreds of thousands of farmers at the same time. Therefore, the more challenging piece of the equation would be for Hatsun Agro and its public sector partner(s) to identify and engage with the farmers who demonstrate the highest chances of success for the program. While it is very hard to get people to part from their old ways of doing things, you will generally find in the crowd a few who are naturally driven and growth-oriented. In this particular case, I would try and find those farmer-entrepreneurs and place a concentrated bet on helping them increase yields and heard sizes. As local governments may be inclined towards a more inclusive approach based on their electoral agendas, Hatsun Agro would probably be better off conducting the farmer selection phase on their own and only involving the public sector in the implementation phase of the program.
Thank you for the great analysis and commentary Justin. It’s interesting to see that only 17% of agricultural production growth came from productivity gains during the early 2000s. To answer your question on who of the farmers and the corporations will get the governments’ backing, I think that it is most likely to go farmers’ way as those voters are becoming more and more key for politicians. Indeed with urbanization and the urge in internet usage, voters in cities are becoming more and more demanding and harder to please than rural voters who have a narrower set of criteria for judging politicians such as their pro-agriculture policies.
Thank you for the interesting read Yuwa. Your piece highlights the difficult trade-offs that many financially-constrained African governments face and showcases why strong central governments with extensive planning and crisis response capacity are critical in the developing world. Given the financial cost of managing such droughts, I believe that more African governments should seriously evaluate the benefits of subscribing to country-level drought insurance policies. The ARC risk pooling system of the African Union is a good example of such solutions (http://www.africanriskcapacity.org/2016/10/29/how-arc-works/). As the previous posts highlighted, large-scale investment in irrigation infrastructure is an important piece of the long-term solution even though financing is an issue. I believe that ADMARC can play an important role in solving the financing equation if its incentives are aligned well-enough with those of the growers. An approach could be for ADMARC to move from a regulation function to a regulation and business-like role which would allow it to raise capital and on-lend to growers for irrigation infrastructure. Maize purchased from farmers could be partially sold in the market to service debt. As traders are inclined to take advantage of shortage events to artificially inflate prices, by having regular commercial relationships with a large number of cereal traders in neighboring countries ADMARC will be well positionned to leverage those relationships more efficiently in the event of future supply shocks in the country.